After this segment, you
can see Jim's
Sudden:Death picks
here...
Jim:
I'm just glad the
worst week in seven
years is over!...
Another incredibly
punishing day!... Up big
first, then down huge,
as the market yawned at
the congressional vote
on the mortgage rescue
package... just awful...
awful day... and a sign
again... do not trust
this market... and...
sell, sell, sell!
whenever you get
strength, ever, morning,
noon or night...
particularly this
morning...
Speaking of trust...
You see this "scarlet
letter J"... It doesn't
stand for "Jim"... It
stands for "jumping to
conclusions" idiotically
about
Wachovia Corp. (WB),
and it's great... yes,
great... CEO Bob
Steel... putting that
man on the
Wall of Shame
this Monday, when it
looked like Wachovia
would sell its banking
operations to
Citigroup (C)
in a deal that probably
would have wiped out
shareholders... I
thought he wanted to do
this...
Now we learn that the
whole time that we've
had Steel up on the
Wall of Shame,
he's been busting his
butt to get shareholders
a better deal... and
succeeding!... with the
$7 a share sale to
Wells Fargo (WFC)!...
Something that would
have been done even
higher - maybe much
higher - if the FDIC
hadn't clumsily and
hand-handedly butted in
to tear down the
company.
I should have been up
there all week!...
Me!... Not him... for
getting this one so
wrong! I didn't believe
that the much-sainted,
Sheila Bair, from the
FDIC, would confiscate
this company. She's so
loved... she was
confiscating the company
from Steel and the
shareholders, and
handing it over for a
song to Citigroup. Well,
let's just hope she's
done interfering and she
lets
Wells Fargo (WFC)
buy
Wachovia (WB)...
but, then again, she's
so capricious, letting
Downey Financial
(DSL)
and
BankUnited (BKUNA)
keep offering those
really crummy mortgages,
while trying to gut
Wachovia, showing only
that she's more Chavez
than perhaps Che...
Bob Steel... you are the
man of steel! And I
apologize for thinking
that this story was
over, when in fact,
nothing could be further
from the truth...
On Monday, I castigated
myself for trusting you,
Bob Steel...
Today, I am telling the
world that I was a
fool... not to trust
you... and a real jerk -
another word that starts
with "J" - for putting
you up on the
Wall of Shame...
when you deserve to be
on the "wall of
acclaim"...
Here's a guy who put his
company's best interest
ahead of his own
reputation... I don't
know how many CEOs would
do that. He couldn't
defend himself on this
show, or his bank, to
the media... because
that would have ended up
destroying Wachovia...
Now, when you look at
the deal with Wells
Fargo, it's clear that
Steel was right. The
FDIC was trying to
shotgun a marriage
between Wachovia and
Citigroup, but the
marriage wasn't needed.
The FDIC should have
known this if they were
paying any attention to
the environment, as a
recent change in tax
law... one that happened
on the same day the FDIC
tried to steal Wachovia
and give it to Citigroup
in a sweetheart deal,
and betray you... and
allows banks to deduct
the entire amount of
embedded unrealized
losses, from any other
bank they acquire, for
tax purposes. Huh...
before this change,
there used to be severe
limitations on what a
bank could deduct but,
on the same darn day
that the FDIC tried to
"rescue" Wachovia, the
rules changed, and that
made Wachovia a much
better investment,
because acquirers now
could take out tens of
billions in tax
deductions...
Now, if the much-loved
and sane and vaunted
FDIC had focused... if
anyone there had been
doing their job... they
never would have tried
to "save" Wachovia... by
selling it to Citigroup
for next to nothing, and
putting taxpayer money
on the line...
Do you know I'm the only
guy all day who
criticized them?... No
one criticizes them.
They're now clearly as
incompetent as the rest
of the administration,
who let "too big to
fail" Lehman Brothers
fail... who confiscated
the Fannie and Freddie,
when they told us the
day before that they
were solvent...
I don't get it... Sheila
Bair is now running the
FDIC like a planned
economy...
But this great news for
Wells Fargo... and part
of the reason why it
doesn't need government
help to buy Wachovia -
because Wachovia's
actually a pretty
healthy bank... made a
better takeover target
by the tax change...
just like Bob Steel said
when he came on the
show...
I thought he had gotten
it wrong, but it turns
out he was right all
along...
You know what that makes
me?... I'm the joker who
piled on, right when he
was working hard to get
a better good deal for
his shareholders. $7 is
nothing to frown about
in a bank, especially
not in October of
2008... especially when
you consider it was
trading under $2 on
Monday...
I wouldn't be surprised
to see a bidding war
erupt between Wells
Fargo and Citigroup for
this company, since
WFC's stock went up
after the announcement,
because it's always
lacked a nationwide
footprint and a great
set of brokers like
Wachovia has... And
Citigroup's stock went
down huge on the news
because, pilfering
Wachovia from Steel with
help from the FDIC, made
it too big to fail...
What's a point or two to
Wachovia, if that many
points are on the line
for Citigroup?...
I thought Wachovia's
shareholders were done
for. Now it looks like
they could benefit from
this potential bidding
war.
I was a jerk... I was a
joker... if not a
midnight toker, but not
a smoker... although you
wouldn't know it from
this
Wall of Shame
episode. My judgment was
bad. I jumped to
conclusions. So I'm
wearing the "J"... the
"J" of shame... for
getting Wachovia wrong,
and giving up on Bob
Steel, dissing his
reputation... when I
should have been
doubling down on the guy
and his bank. I bowed to
public pressure.
I think, given what I
knew at the time, I had
to be angry, but now I
know the full story...
Bob Steel is a man who
didn't quit, even after
the government told him
to give his bank up and
wreck it. Kryptonite
couldn't keep this "man
of steel" down.
Oh, and buy the way...
genius move for Well
Fargo... $15.4 billion
for Wachovia and, not
long ago, people thought
that Wachovia Securities
business alone was worth
$10 billion. If Wells
Fargo just operates the
brokerage business
semi-competently, until
the environment gets
better, they'll have a
saleable asset that
might pay for the whole
deal, giving them the
bank they wanted nearly
for free. I don't know
why Citgroup didn't do
that... maybe because
Vikram Pandit (Citigroup
CEO) doesn't get it...
Plus, by taking losses
on Wachovia's portfolio,
Wells Fargo won't be a
taxpayer for years...
Who knows how many of
those bad assets they
can send to Washington,
now that our mortgage
plan has been passed...
And, of course, Wells
could just hang onto
Wachovia's securities
business and just run it
forever, because their
reputation is in tact...
Who else can say that?
Now, what should we do
with this new opening in
the
Wall of Shame?...
I'd put myself up, but
I've already got he
scarlet letter...
No, I've got a better
idea, and this one's a
good one...
How about this fella
whom I used to
contribute to, in the
days when I was allowed
to... Harry Reid, the
Senate Majority
Leader... As much as I
like the guy for helping
the "Invest In America"
rescue package, he did
something incredibly
irresponsible on
Wednesday...
I am putting him on the
Wall of Shame,
because his statement
(where Reid referred to
knowing that a major
insurance company was on
the verge of bankruptcy)
was irresponsible to the
nth degree, and was also
responsible for trashing
the stocks of insurance
companies that you may
own, and making people
worry about their
annuities...
Everyone was guessing
which one... Look at the
damage and havoc his
warning created...
Prudential (PRU)
opened Wednesday at $70,
and closed at $57, down
18%...
MetLife (MET)
opened at $54 Wednesday,
and was down to $40 by
yesterday's close, a 24%
decline... The worst was
Hartford Financial
Services Group Inc.
(HIG),
which fell from $40 to
$25 over these two days,
down 35%... all because
Harry Reid said that a
major insurance company
was on the verge of
bankruptcy... even
though, as it turned
out, he had no reason to
say it...
He's a senator... he
should know better than
that. I'm adding him to
the list of people who,
in a more savage time,
might have been on the
hook... perhaps, on a
meat hook... in the
fancy-schmancy
meat-packing district.
. . . .
.
The Bottom Line!:
Bob Steel, right here, I'm
apologizing! I should never have doubted
this man. He should not have been on the
Wall of Shame.
He was working hard the whole time, he
just couldn't talk about it. He just
saved his shareholders in a true "man of
steel" like fashion. I'll sport the
scarlet "J" to punish myself for the
next four trading days.... the same
amount of time that Steel was on the
Wall. Sheila Bair, if you confiscate one
more great American company... well,
let's just say, I can make a lot of room
(on the
Wall of Shame)...
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Final Segment 2
See complete
recommendation comments
below...
Final Segment
1 Title:
'Mad Mail'...
. . . .
.
Featured
Stock(s):
See comments below...
After this segment, you
can see Jim's
Sudden:Death picks
here...
. . . .
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Cramer's
rating on
this stock
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day
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price
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day
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each)
Q:
My mom, my
husband and I
value your
opinion over
everyone else's,
so I am writing
for your
thoughts on
Manulife
Financial.
I have almost
500 shares and I
have been
holding onto it
because I think
it is a good
stock and has a
nice dividend.
In light of the
recent events, I
really would
like to know
what you think
about this stock
now, since it is
somewhat tied to
the current
mortgage and
banking crisis.
One other
question:
Can't YOU run
for President?
JJC:
First, I'm not
recommending any
insurance
companies...
none. Just
too complex
right now.
We're still
dealing with the
Lehman fallout.
I mean Lehman
was too big to
fail and they
let it fail, and
a lot of
insurance
companies are
affected by it.
All I know is
that I'm not
recommending
MFC. I'm
trying to be
very general
here. And
all these people
who want me to
run for
President... I
mean, you have
no idea what
it's like to be
me...
First of all,
I've got to be
the most hated
guy of any of
the people who
have the big
parties and
stuff...
but I am loved
in the Summit
Elks and,
frankly, that's
all I care
about.
Q:
I've invested
more than 75% of
what I had in
McDermott, which
has lost over
60% of its value
in the past 8
months.
You always say
to "never invest
more than 20% in
a speculative
stock," but that
is exactly what
I've done.
Should I
continue to
invest, hold or
divest in MDR?
I think this
company is bound
to make a HUGE
turnaround, but,
in this
environment,
what is your
perspective?
JJC:
You've been hurt
by hedge
fund-itus...
It's a critical
disease.
It is about
hedge funds that
have a lot of
redemptions that
owned a lot of
MDR. The
stock is way,
way too low to
sell but, until
we have every
hedge fund blow
it out, which
won't happen
until the end of
December, I will
not counsel
buying anymore
MDR, unless
McCain wins,
because he seems
to be in favor
of dirty coal...
although that
wasn't really
clear. I
caught that
debate last
night, like you
did, and I have
no comment about
it...
na
na
na
Mad Mail
General
trading volume
question...
Q:
Please educate
me. I've
noticed recently
every day a big
spike in volume
just before the
close on the
stocks I trade.
How is it that
giant volume
trades occur at
the last minute?
JJC:
I've noticed
this too.
I've been really
busting my butt.
This was a big
piece of
Google, Inc. (GOOG)
that traded
right at the
close... I
do not know.
I'd rather not
say, well, I
have a theory,
because I don't
know... I
actually... this
is something
that's happening
in this market.
This market is
so crazy and
whacky and
negative that
there are things
that are
happening right
now that I don't
understand, and
I've been
trading...
1979 was my
first trade...
like, 28 years.
I've never seen
anything like
this. I
have no idea
what's going on
at the close.
[
end of final segment ]
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think it is indicated by his
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Please read his comments to
decide for yourself.
Thumbs down -
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based on his comments
We do our best to interpret
Jim's opinion on stocks, as
we think it is indicated by
his comments during the
show. Please read his
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Back up the truck -
indicated by Jim, when he
says the stock is so good,
that he would do a
'mon-back' on the stock...
In other words, this is the
sound someone would say to a
truck driver, "Come on
back... " as he is "backing
up the truck" to load up on
his cargo. Translation
for buying stocks:
This recommendation by Jim
indicates that, after you do
your own
homework on the stock,
you should feel comfortable
loading up on it, as it is
in a good position to be
bought at this point.
Stumped. - Of the
2,000+ stocks that Jim
Cramer has in his head, for
which he has an informed
opinion, he sometimes comes
across a caller with a stock
he does not know well enough
to opine on... He then
indicates he is stumped and
will have to come back to
it, after he does some
homework of his own on
the stock. This
usually occurs during the
Lightning Round, when Jim
does not know in advance who
is calling, or what their
stock question is about.
Definitions of key phrases
used by Jim, known as
"Cramerisms":
Definition: 'Pull the
trigger' is Jim's phrase for making
the decision at that point to trade -
either to 'buy' or
to 'sell' (although he
usually uses the phrase for
buying), as if to say you
should feel comfortable
enough to make the final
decision without looking
back...
Definition: 'Ring
the Register' is Jim's phrase for
selling a stock, and making
it a final sale, that you
should not look back on.
Put it behind you.
Definition:'Let It Come In' indicates how you
may wait for it to pull back, or have the
stock price come down briefly, as your
chance (after letting it come in) to buy
the rest of your position (i.e., total
number of shares you own in that stock).
Definition:'backing it up'
or 'doing a 'mon-back' is Jim's
phrase for the metaphor of backing up a
truck to load up on a stock by buying
it. 'Mon-back is short for the
imaginary worker saying, 'Come on
back...' as the truck is backing up to
receive its load... Notice that we use
the little truck icon to indicate where
Jim has mentioned this.
Translation for buying
stocks: This
recommendation by Jim
indicates that, after you do
your own
homework on the stock,
you should feel comfortable
loading up on it, as it is
in a good position to be
bought at this point.
See more
"Cramerisms" & other
financial phrases
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Jim Cramer recommends after
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